The bullwhip effect is the inherent increase in demand
fluctuation up the supply chain (i.e., away from
customer). Managing the bullwhip effect is minimizing
the fluctuation and variation of the demand (i.e., orders
from one stage of a supply chain to the next stage of the
supply chain) throughout the supply chain. This paper
will offer a literature review of this topic, note the key
contributions, discuss current practices for managing the
bullwhip effect, and explain why it is necessary for more
research to be done in the area, specifically for continuous review policies.

Orders/Time Period

ABSTRACT

Time

1. INTRODUCTION

Demand

Retailer

Factory

Figure 1.1: The Bullwhip Effect
The bullwhip effect is the inherent increase in demand
fluctuation up the supply chain (i.e., away from
customer), as shown in Figure 1.1. Managing the
bullwhip effect is minimizing the fluctuation and variation
of the demand (i.e., orders from one stage of a supply
chain to the next stage of the supply chain) throughout the
supply chain.
In order to effectively manage the bullwhip effect, the
primary causes of the bullwhip effect must be understood.
The main causes of the bullwhip effect were identified,
and analytical proofs were constructed to show why these
four causes contributed to the bullwhip effect and
solutions were offered to manage the bullwhip effect by
Lee, Padmanabhan, and Whang [9] and [10].
The idea of businesses sharing information was
introduced by Forrester [5]. This concept, when extended
to individual businesses within a supply chain, is
considered the best strategy when trying to reduce the
bullwhip effect. However, it is impossible to completely
eliminate the bullwhip effect from a supply chain (at least, in realistic supply chains).
The main purposes of this paper are to: explain the
causes and implications of the bullwhip effect, summarize
the techniques utilized to manage the bullwhip effect, and
present research detailing why the bullwhip effect is
inherent to all supply chains.

2. CAUSES AND IMPLICATIONS OF
THE BULLWHIP EFFECT
Lee, Padmanabhan, and Whang [9] logically and
mathematically proved that the key causes of the bullwhip
effect are: demand forecast updating, order batching,
price fluctuation, and shortage gaming.
When
considering a periodic review policy (i.e., review the
inventory at specified periods and place an order to bring
inventory to a certain level), the following assumptions
are made: demand is constant over time, and past demand
is not used to forecast future demand, no fixed order costs, per unit cost of the product is constant over time, and an
infinite amount of supply is available for a constant lead
time.
The optimal periodic review policy for the above
assumptions is to order the previous period’s demand for
each upcoming period. Therefore, the demand and orders
will have the same distribution and variation, and hence
no bullwhip effect in the system. However, none of the
aforementioned assumptions are entirely realistic for an
authentic supply chain.
Removing the assumptions (one at a time) leads to the
four causes of the bullwhip effect. The following
subsections of the report explain the analytical evidence

behind the causes of the bullwhip effect that were
identified by Lee, Padmanabhan, and Whang [9].
2.1. Demand forecast updating
Demand forecast updating, also known as demand signal
processing, and occurs when the first assumption is
violated. Hence, demand is not constant and observed
past demand is used to forecast future demand.
By finding a closed form solution relating the
variance of an order to the variance of the demand for a
single stage within a supply chain, a theorem was proved
providing two major inferences: variance of orders (i.e.,
which...

You May Also Find These Documents Helpful

...Price effect:
The price change effect on consumption can be broken down into two parts depending upon the change relative in pricing of products and income. The first one is called substitution effect wherein price change of a product leads to change in consumption, here the income remains constant. The second is the income effct wherein the relative income of people changes which leads to a change in the purchasing power, here the price is considered constant.
* prices change &gt;&gt; income, prices both change relatively
* substitution effect - price changes &gt;&gt; relative prices of good changes
* willing to buy more of good that became relatively cheaper
* price change for 1 good relatively effects the other good as well
* utility stays constant, price declines &gt;&gt; demand increases
* causes shift along indifference curve (to point where more of one good bought than before)
* income effect - price falls &gt;&gt; relative income increases &gt;&gt; increase in real purchasing power
* price held constant (as if income increased), quantity demanded depends on whether good is inferior/normal
* outward or inward shift to new demand curve
* inferior good &gt;&gt; inward shift &gt;&gt; may or may not overtake substitution effect
* may be large enough to cause demand to slope upward (stop consuming some...

...
Coffee effects
Coffee has been the most popular drink in all the cultures for years. Especially here in Albania, when people do all of their meetings or works in cafeterias. Most of us drink coffee like every day and some of us drink it more than one time in a day. Some people drink coffee because they like the taste of it some others drink it when they are sleepy or drink it for other effects and others just drink a coffee without any reason for example there are a lot of people who drink coffee every morning because it has become a habit for them. But how bad is coffee for our organism? Does coffee have positive effects? Should we drink it or not?
There are different statements that are pro and against drinking of coffee. Drinking coffee it has different side effects, it affects the body in different ways. Caffeine increases stress in people who may consume it every day, it also contributes to caries into the teeth. Sleep is affected by the consume of coffee also, coffee who includes decaf, has huge amounts of Vitamin K, which it has badly affects for people with risk attacks.
Consuming coffee also results in women while they are pregnant, side affects like birth defects, miscarriages, premature birth and with low birth weight. It also interferes with adenosine; it is a brain chemical that helps the calming effect. Also they made researches, that coffee gives a huge jump and causes...

...﻿Attaining power in works of literature can be a very effective way to bring a character to life. Once a character gains power, the reader sees their true personality, whether that is a good or evil personality. Power can bring people together and provide happiness or destroy a person and cause chaos. Many works of literature contain characters that are affected by power. Some characters are affected for the better while others are destroyed by the effects of power. The destructive effects of power are evident through characters in Lord of the Flies by William Golding, Xanadu by Audrey Thomas, and Macbeth by William Shakespeare.
The first effect of power on characters was made evident in the novel Lord of the Flies by William Golding. One character who was affected by power was Roger. His power was made evident when Golding wrote:
High overhead, Roger, with a sense of delirious abandonment, leaned all his weight on the lever. Ralph heard the great rock long before he saw it. He was aware of a jolt in the earth that came to him through the soles of his feet, and the breaking sound of stones at the top of the cliff. Then the monstrous red thing bounded across the neck and he flung himself fat while the tribe shrieked. The rock struck Piggy a glancing blow from chin to knee. (Golding 200)
Roger wanted everyone on the island to know that he did have power. Roger chose to demonstrate this power by killing Piggy. Roger’s desire...

...The Effect of Fear
Fear can impact us in many ways. It limits us from doing things we want in life and even for ourselves. It constrains us, affects all our actions and decisions, and ends up ruling our lives. It may also lead us to do inadequate steps that may destruct others and us. On the other hand, fear stays as the permanent alarm in our lives that keeps us from doing reckless moves and actions. There exist multiple reasons that make this topic interesting. The various effects of fear on society are being unveiled by the day. This is ensured by the increasing concern of psychologists in the domain of fear and its effect on society. Fear is the controller of our lives. It controls us starting from the minor concepts such as drinking to avoid daily trouble, and ending with the major concepts such as causing wars (For example, fearing a fast developing country and declaring war on it). In both the plays A Streetcar Named Desire and A Doll’s House, fear plays two distinct roles and enforces different effects on the actions of the characters.
Fear is defined as the emotional reaction of mind and body to the recognition of an alerting loss of control and regaining of control. The outcome of fear depends on the personality of the afraid person and the way he/she deals with this fear. And thus, fear can have both positive and negative effects. As for the positive effects, sometimes our...

...4 December 2012
Effects of Technology in our world
I. Introduction: State your plan for the Introduction paragraph
* Changes in technology over the years
* Why we depend on technology so much
* How much we rely on technology
Thesis statement: In today’s world, as technology is advancing around us, some of the major effects that can be seen are medical technology advances, ease of communication with the growing technology, and the negative effects on our body.
II. Body 1: Topic sentence: As today’s technology is changing, some of the most major effects of it are superior advances in the medical field.
A. Tissue Engineering
B. Monitoring Systems
C. Medical Procedures
III. Body 2: Topic sentence: Next, as technology keeps growing around us, we are seeing an increase of computers, smart phones, and entertainment options that change the world with how we communicate, get informed, and ways to keep entertained; it’s becoming easier and more convenient to stay in touch with people regardless of where they may be located.
A. Computers – ways we keep entertained
B. Smart Phones – ways we communicate
C. Entertainment / News – ways we get informed
IV. Body 3: Topic sentence: Another major effect of technology is that it gradually destroys our body and mind.
A. Laziness
B. Obesity / Health issues
C. Making us brainless
V. Conclusion:...

...Effects of Music
Music is a very powerful medium and in some societies there have been attempts to control its use. It is powerful at the level of the social group because it facilitates communication which goes beyond words, enables meanings to be shared, and promotes the development and maintenance of individual, group, cultural and national identities. It is powerful at the individual level because it can induce multiple responses – physiological, movement, mood, emotional, cognitive and behavioral. Few other stimuli have effects on such a wide range of human functions. The brain’s multiple processing of music can make it difficult to predict the particular effects of any piece of music on any individual. “Music is an important and extremely useful tool in the way we learn and to deny its power is a waste of a truly wonderful resource” (Kristian David Olson). Though some would look at music as a small footnote in the progression of humanity, it is in fact a much greater force; for some, it defines their very existence. The fact is, music is a driving force in society; it has been present since the dawn of man. The average person spends several hours a day listening to music, whether they see it as a main activity or just as something to take up space in the background. It is not surprising, then, that music has a great effect on how humans think and act, possibly even affecting intelligence. Several studies have...

...Effects of Music
When people are going though a bad break up, new relationship or the lose of a
loved one they turn to music for the answer. To find that, either they’re not alone in there
struggles or to emit their feelings to the world by blasting the radio in the car on your
way to school, work, grocery store...ect. However does the music effect out everyday
reactions in a pessimistic way? Does playing an instrument actually progress your
learning abilities ? Is it possible that music can assist in healing people? Some people
truly believe that music can do impossible things, be the key to unlocking Alzheimers ,
improving focus in students, and change our perception on the world. Others consider
music to be just an enjoyable tune to listen to on the drive home.
Research has already proven that music affects your mood, but does it change
how you would react in normal everyday situations? According to researcher “Jacob Jolij
and student Maaike Meurs of the psychological department of the University of
Groningen , music has an even more dramatic effect on perception: even if
there is nothing to see, people sometimes still see happy faces when they are listening to
happy music and sad faces when they are listening to sad music.”(University of
Groningen) this is true because our brain only allows us to take on our perception of...

...service, or event) in a public medium in order to promote sales or attendance (Oxford Dictionary)
History:
First advertising agency was made by Volney B. Palmer in 1841. But the advertising agencies become popular in 20th century. And with the increasing effect of globalization they become more significant. In the beginning of 20th century, advertising a product moved from static announcement to a more persuasive manner. Companies were able to realize their customers that they actually need that product. By the end of 20th century the limits of ads agencies grown from print media to the more sophisticated and advance media like television and internet.
Effects:
Regarding the effects of advertisements, it has positive as well as negative effects. Positive effects are that, they gives the human lives creativity, inspiration, variety, and above all it affects positively on our brain development because we constantly see advertising in different shapes and colors and we exercise our brain. Advertising can be used to inform, educate and motivate the public about non-commercial issues, such as AIDS, political ideology, energy conservation, religious recruitment, and deforestation.
On the other hand, they have some negative effect on society like smoking ads encourage people and make smoking acceptable or less taboo to the society. They make people worry about their dandruff, the less glowing...